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2000 DIGILAW 480 (RAJ)

Ujjagar Singh Mool Singh Sethi v. Food Corporation of India

2000-04-21

SUNIL KUMAR GARG

body2000
JUDGMENT 1. - These two first appeals are being decided by this judgment as they have been preferred by the appellant-non-petitioner against a common judgment dated 11.9.1984 passed by the learned District Judge, jodhpur and in both the appeals, parties are the same, questions of law and facts are the same and both the applications filed by the appellant-non-petitioner were decided by the learned District judge, jodhpur by a common judgment dated 11.9.1984. 2. The facts giving rise to these appeals are as follows : Note-Facts are being taken from S.B. Civil First Appeal No. 95/1984. 3. The respondent-petitioner filed an application in the Court of District Judge, Jodhpur a/s. 20(4) of the Arbitration Act, 1940 (hereinafter referred to as 'the Act of 1940') on 31.8.1978 stating that the petitioner-respondent is a statutory body dealing in purchase, sale and stacking of food grains. The petitioner-respondent, for its office at Jodhpur, invited tenders for loading, unloading and stacking of food grains for the period 1.9.1973 to 31.8.1975. The appellant-non-petitioner submitted his tender alongwith earnest money of Rs. 2,000/- on 20.3.1973 and this tender was accepted by the petitioner-respondent and agreement was executed between the parties and as per the terms of the agreement, the appellant-non-petitioner was to carry out the works from 1.9.1973 to 31.8.1975, meaning thereby the work was to be completed within two years. Rs. 6,000/- as security was also deposited by the appellant-non-petitioner. The period of agreement thus expired on 31.8.1975. The case of the respondent-petitioner in its application against the appellant-non-petitioner was that the appellant-non-petitioner could not stack 39,864 bags of wheat in the godowns of the respondent-petitioner, though this work was to be done by the appellant-non.-petitioner. The respondent-petitioner got this work carried out through another Contractor and for that purpose, it has to incur some expenses and thus, loss of Rs. 63,945.62 was suffered by the respondent-petitioner. Since there is arbitration Clause XIX in the agreement that in case any dispute arises between the parties, the matter can be referred to the arbitration, therefore, the respondent-petitioner has filed this application before the District Judge for referring the matter to the arbitration as dispute has arisen between the respondent-petitioner and the appellant-non-petitioner in respect of loading/ unloading of bags of wheat. 4. 4. This application was contested by the appellant-non-petitioner by filing a reply in the lower Court on 3.3.1979 and the main allegations of the appellant-non-petitioner are that the contract between the parties has expired on 31.8.1975 and on the application of the appellant-non-petitioner, the respondent-petitioner released the security deposit to the appellant-non-petitioner through letter No. 1F.F1(25)11&T/DM-JU/73-74/6043 dated 11.9.1975 and in that letter, the respondent-petitioner had admitted that the appellant-non-petitioner was not responsible for any loss, wastage or damages etc. and, therefore, the averment made by the respondent-petitioner that the appellant-non-petitioner was responsible for the loss to t he tune of Rs. 63,945.62, is not correct. Hence, no question arises for referring the matter to the arbitration. Since the contract has already expired on 31.8.1975, therefore, the matter could not be referred to the arbitration. Hence, the application be rejected. 5. From the pleadings of the parties, the learned District Judge, Jodhpur framed the following issues on 2.1.1981 1- D;k okn&i= ds ij dze 7 esa of.kZr fookn i{kdkjksa ds e/; gq, bdjkjukesa dh /kkjk XIX ds vUrxZr e/;LFk dks izfrizs"k.k ( jsQj ) fd;s tkus ;ksX; gSa\ 2- D;k ;g okn&i= pyus ;ksX; ugha gSa D;ksafd fooknxzLr fookn i{kdkjksa das e/; gq;s lafonk dh lekfIr ds i'pkr~ mRiUu gqvk gS\ 3- D;k ;g okn bl U;k;ky; ds Jo.k ;ksX; ugha gS\ 4- i{kdkj fdl lgk;rk ds vf/kdkjh gS\ 6. The learned District Judge, Jodhpur decided issues No.1 & 2 simultaneously by his judgment dated 11.9.1984 in favour of the respondent-petitioner and against the appellant-non-petitioner. The learned District Judge came to the conclusion that even after the conclusion of the contract, the dispute arises between the parties in respect of stacking of 39,864 bags of wheat can be referred to the arbitration, as per Cl. XIX of the agreement, which pertains to arbitration. The learned District judge accepted the application of the respondent-petitioner and referred the matter for arbitration to the Managing Director, Food Corporation of India, New Delhi. 7. XIX of the agreement, which pertains to arbitration. The learned District judge accepted the application of the respondent-petitioner and referred the matter for arbitration to the Managing Director, Food Corporation of India, New Delhi. 7. Aggrieved by the said judgment and order dated 11.9.1984 passed by the learned District Judge, Jodhpur, the appellant-non-petitioner has preferred this appeal in this Court:- ' Note-Similar issue was in respect of another application No. 110/78 between the parties and this application was also decided by the learned District Judge, Jodhpur by the same judgment dated 11.9.1984 and aggrieved by that judgment also, the appellant-non-petitioner has preferred appeal in this Court being S.B. Civil Ist Appeal No. 96/84. 8. The main allegations of the learned counsel for the appellant-non-petitioner in these appeals are as follows : (1) That the appellant-non-petitioner is not liable for the loss and damages concerning to the period after the contract was completed i.e. after 31.8.1975. (2) That the application filed by the respondent-petitioner is not maintainable as there had been full and final settlement of the contract between the parties. (3) That Cl. XIX of the agreement pertaining to arbitration is not attracted after the satisfactory completion of the agreement. 9. Before proceeding further, it may be stated here that there is no dispute on the point that the respondent-petitioner-Corporation refunded the security amount to the appellant-non-petitioner through letter dated 11.9.1975 (Annex. A) and in that letter, it has been admitted by the respondent-petitioner-Corporation that there was no breach by the Contractor of any terms and conditions of the contract and no loss and expenses suffered by the Corporation due to Contractor's negligence or un-workman-like performance. Further, it has been stated that no demurrage was incurred to delay or negligence on the part of the Contractor in loading/unloading and removal of Corporation's goods within the free time allowed. 10. Thus, so far as Annex. A is concerned, it goes to show that when the earnest money was refunded to the appellant-non-petitioner, it was found that there was no negligence on the part of the appellant-non-petitioner. There was also no dispute on the point that the period of contract had expired on 31.8.1975 and 39,864 bags of wheat were received after 14.8.1975, but before 31.8.1975 and they could not be stacked in the god owns due to exceptionally large arrivals during this period and left dumped at the platform. There was also no dispute on the point that the period of contract had expired on 31.8.1975 and 39,864 bags of wheat were received after 14.8.1975, but before 31.8.1975 and they could not be stacked in the god owns due to exceptionally large arrivals during this period and left dumped at the platform. It means that 39,864 bags of wheat pertain to that period when the contract was in force. 11. Now the question arises whether there was any liability on the part of the appellant-non-petitioner to stack these 39,864 bags of wheat in the godowns of the respondent-petitioner or not and if he has not done so, whether any dispute arises between the parties and that dispute can be referred to the arbitration or not, as per Cl. XIX of the agreement, under section 20 of the Act of 1940. 12. Clause XIX of the agreement pertaining to arbitration reads as under:- "XIX Arbitration.-All disputes and differences arising out of or in any way touching or concerning the agreement whatsoever (except as to any matter the decision of which is expressly provided for in the contract) shall be referred to the sole arbitration of any person appointed by the Managing Director of the Food Corporation of India. It will be no objection to any such appointment that person appointed is or was an employee of the Corporation that he had to deal with the matters to which the contract relates and that in the course of his duties as such employee of the Corporation he had expressed views on all or any of the matter in dispute or difference. The award of such Arbitrator shall be final and binding on the parties to this contract. It is a term of the contract that in the event of such Arbitrator to whom the matter is originally referred being transferred or vacating his office, or dying being unable to act for any reason, the Managing Director of the Food Corporation of India at the time of such transfer vacation of office, death or inability to act shall appoint another person to act as Arbitrator. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contractor that no person other than a person appointed as aforesaid should act as Arbitrator and if for any reason that is not possible the matter is not be referred to Arbitration at all : Provided further that any demand for arbitration in respect of any claim (s) of the contractors, under the contract shall be in writing and made within one year of the date of termination or completion (Expiry of the period) of the contract and where such demand is not made within that period, the claim(s) of the contractors shall be deemed to have been waived and absolutely barred and the Corporation shall be discharged and released of all liabilities under the contract in respect of those claims : It is further provided that the arbitrator, may, from time to time with the consent of the parties, enlarge the time for making and publishing the award. The Costs of and in connection with arbitration shall be at the discretion of the arbitrator who may make a suitable provision for the same in his award. Subject as aforesaid the Arbitration Act, 1940 shall apply to the Arbitration proceedings under this clause." 13. For making reference under section 20 of the Act of 1940, there are certain essential conditions necessary to make this section applicable and they are as follows "(a) the parties must have entered into an arbitration agreement; (b) the agreement must have been entered into before a suit with respect of its subject-matter is filed in Court; (c) a difference, contemplated in the agreement, must have arisen; and (d) the Court has jurisdiction in the matter." 14. If these conditions are satisfied, the parties may avail of the procedure. Before a reference may be made under this section, the existence of a dispute is essential and at this stage, the Court is not concerned with the question whether the claim of the party to the arbitration agreement is sustainable or not and what the Court is to see is that there must be some dispute between the parties. There can be a dispute only when a claim is asserted by one party and denied by the other on whatever grounds. 15. There can be a dispute only when a claim is asserted by one party and denied by the other on whatever grounds. 15. Looking to the above basic principles, the facts of the present appeals are to be examined. 16. The learned District Judge in para 11 of the judgment has categorically stated that in the agreement there is no such provision that even after the conclusion of the contract i.e. after 31.8.1975, if any work remains undone for the period during which the agreement was in force, such work, which has not been completed, cannot be completed even after the expiry of the agreement and for that, if any dispute arises between the parties, such dispute can easily be referred to arbitration for decision in terms of Cl. XIX of the agreement. In my opinion, these findings of the learned District Judge do not suffer from any infirmity and are also covered by the four conditions just mentioned above. 17. The argument that since No Dues Certificate has been issued to the appellant-non-petitioner, would not affect the case of the respondent-petitioner, simply because 39,864 bags of wheat which were received after 14.8.1975 could not be stacked by the appellant-non-petitioner in the godowns due to exceptionally large arrivals and these bags of wheat were received by the appellant-non-petitioner before the expiry of the period of agreement i.e. 31.8.1975. Hence, since the dispute pertains to the period before the agreement expired i.e. on 31.8.1975, therefore, the findings of the learned District Judge are sustainable and both the appeals filed by the appellant-non-petitioners are liable to be dismissed. 18. The learned counsel for the appellant-non-petitioner has placed reliance on the following two decisions (1) M/s. Hans Construction Company v. Delhi Development Authority & Ors., AIR 1997 Delhi 68; (2) The Chief Administrator, Dandakaranya Project, Koraput & Ann v. M/s. Prabartak Commercial Corporation Ltd., AIR 1975 Madhya Pradesh 152. 19. In my opinion, these two decisions are not applicable to the facts of the present case. 20. So far as the case of M/s. Hans Construction Company (supra) is concerned, it has no connection with the present case as in that case agreement provided settlement of certain dispute finally by the designated authority. Here, the position is different one. 21. In my opinion, these two decisions are not applicable to the facts of the present case. 20. So far as the case of M/s. Hans Construction Company (supra) is concerned, it has no connection with the present case as in that case agreement provided settlement of certain dispute finally by the designated authority. Here, the position is different one. 21. So far as the second case in Chief Administrator, Dandakaranya Project (supra) is concerned, the same is also not applicable to the present case as in that case, it was found that there was no dispute and reference was found invalid. But, in the present case, as stated above, there is a dispute between the parties with respect to stacking of 39,864 bags of wheats. 22. For the aforesaid reasons, both the appeals after affirming the judgment and order dated 11.9.1984 passed by the learned District Judge, jodhpur, are dismissed. No order as to costs.Appeal dismissed. *******